Bank Accounts for Children
There are numerous bank and building societies offering special children’s accounts.
The key issues to consider are the interest rate being offered, the terms of access and any age restrictions. Children can open bank accounts and it should be easier to arrange for the account to be opened without deduction of any tax at source.
Children can only earn tax-free interest up to £100 a year on money given by a parent (£100 per parent). Above that amount, the interest is taxed as the parent’s income.
Children can earn tax-free interest up to their full personal allowance where money is given by anyone other than a parent.
Generally speaking it will be sensible for any long term savings being established for children to be invested in the stock market rather than a bank account as despite higher risk and volatility in the short term, stock market linked accounts are likely to do vastly better than cash based accounts over the medium and long term.
Contact us for further information.